TD Financial institution faces Ponzi scheme liquidators in the hunt for $5.7B in trial


TD Financial institution must be held accountable for greater than $5.7 billion Cdn of losses on the collapsed Antigua financial institution of former Texas financier Robert Allen Stanford, legal professionals for its liquidators argued in an Ontario court docket on Monday.

The joint liquidators of Stanford World Financial institution (SIB) allege “negligence and figuring out help” by means of TD, Canada’s second-biggest lender, in permitting SIB to take care of correspondent accounts, in keeping with a observation filed with the Ontario Awesome Court docket of Justice in 2019.

In previous court docket filings, the plaintiffs had sought damages of $7 billion.

Stanford is serving a 110-year jail time period after being convicted in 2012 of operating a $9.2-billion Ponzi scheme.

Correspondent banking is the industry of offering services and products to offshore monetary establishments. The joint liquidators are Grant Thornton within the British Virgin Islands and the Cayman Islands. 

The plaintiffs allege that TD knew of the “bizarre dangers” from offering the services and products and that the financial institution was once 
due to this fact “reckless.”

“Like everybody else, all the way through the time that Stanford World Financial institution was once a buyer of TD, we had no wisdom of, and no reason why to suspect, any fraudulent process was once going down,” a TD spokesperson stated. “TD isn’t answerable for the fraud dedicated by means of Allen Stanford.”

The trial is scheduled to closing 3 months, a spokesperson for one of the vital plaintiffs’ legal professionals stated.

“If there was once proof enough to warrant prison prosecution, TD would were charged years in the past,” stated James  Shanahan, an analyst at Edward Jones. “A judgment or agreement of [more than] $500 million [US] would wonder the marketplace.”

TD estimated relatively imaginable losses from prison and regulatory movements together with the Stanford litigation of between 0 and $951 million Cdn as of Oct. 31. Provisions associated with prison motion shall be taken when a loss turns into possible and an quantity can also be reliably estimated, it stated in its 2020 annual file.

TD stocks rose 0.three according to cent in Toronto on Monday in a normally down marketplace.

In November, a Swiss court docket ordered Societe Generale SA to give up $190 million deposited by means of Stanford, announcing it had did not do right kind due diligence.

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